Jones Company issued bonds with a $140,000 face value on January 1, Year 1. The five-year term bonds were issued at 98 and had a 7.50% stated rate of interest that is payable in cash on December 31st of each year. Jones amortizes the bond discount using the straight-line method. Based on this information: The total amount of liabilities shown on Jones's December 31, Year 2 balance sheet would be:

Jones Company issued bonds with a $140,000 face value on January 1, Year 1. The five-year term bonds were issued at 98 and had a 7.50% stated rate of interest that is payable in cash on December 31st of each year. Jones amortizes the bond discount using the straight-line method. Based on this information: The total amount of liabilities shown on Jones's December 31, Year 2 balance sheet would be:

$137,200

$137,760

$136,080

$138,320